North Dakota has its only state bank, the Bank of North Dakota (BND). The bank has over $10 billion in assets, and does not have to follow Federal regulations, rules and laws. These banks can lend billions with little or no oversight.
Bank supervision is limited to the state Governor, Attorney General, and State Commissioner of Agriculture.
Every state-level public entity is required to keep deposits in banks, creating a class of ‘captive customers’ who can make loans.
Reading between the lines of a $395,000 state taxpayer-funded report released midway through last month, according to consultants hired by the bank, the bank took deposits from state public entities and produced substandard returns, writes off about $475 million in bad loans each year and provides personal loans and investments to other people in the country..
Experts say that if the bank is run properly and does not make bad loans, the profits will offset a third of the state’s revenue from private property taxes.
Many anonymous sources have confirmed it Banks buy bad loans from private financial institutions. Critics wonder whether the bank’s ability to buy bad personal loans can lead to bad behavior by state banks, or worse, forcing state taxpayers to foot the bill for bad loans to those with political connections?
A businessman in North Dakota who asked to remain anonymous, said that other state banks are very pressured to comply with state financial institutions. He has observed the political pressure exerted on banks, and says that pressure can be applied in a variety of ways. He suspects the pressure could be used to increase political motives and potentially subsidize banks to those with political connections and people who follow orders.
“What’s happening here is that the bank is quietly supporting a portfolio of bad investments. One banking executive said the BND is buying bad loans off its books in order to stay solvent. This raises questions about the quality of the loan in the BND, whose politicians remain opaque. Whereas the state entity that has deposits should have a normal return in this market, it will probably have a negative profit through write-downs even if the bank claims to make a profit. Potentially, banks will lose hundreds of millions every year if they keep depositors’ funds like other financial institutions. This situation continues because people are too afraid to speak up.
Current US Senator of North Dakota John Hoeven is a former President of the Bank. Hoeven was the President of the Bank of North Dakota from 1993-2000, when he used that position to serve as Governor of the state from 2000-2010, and then as one of the state Senators in Washington. Hoeven owns stock in First Western Bank and Trust, headquartered in Minot, North Dakota, and is a member of the bank’s board. He has been accused by some watchdog groups of failing to avoid conflicts of interest related to federal laws that benefit his own banks.
Currently, the Bank of North Dakota is exempt from public disclosure requirements imposed by other government agencies. In 2023, the bank’s auditor issued an adverse opinion, stating that the bank had failed to comply with US General Accounting Principles (GAAP). This lack of public oversight may increase the risk of adequate transparency and accountability, said North Dakota State Senator Kent Weston.
Other sources suggest this practice protects North Dakota’s political class and allows questionable loans to be free from public scrutiny, legislators, the media, or regulators. Bank of North Dakota also handles financial reporting for many of the state’s smaller financial institutions, including insurance and FDIC compliance, as well as providing back-end work for wire transfers and other IT services. Some private financial institutions in the country use the BND SWIFT code and carry out wire transfers through the BND, as an example.
The Bank’s 2023 annual report made some surprising disclosures about the quality of its multi-billion dollar loan portfolio. The nearly $2.5 billion in debt is rated at best as “showing the earliest signs of potential problems” with cash flow “unproven” or “slightly erratic,” all the way down to the impaired rating where “collection or liquidation” is “highly questionable and unlikely.” .
Critics wonder why the bank failed to ‘risk level’ an additional $1.5 billion in loans on its books. $41 million of the $399 million bank equity loan was “unproven” or “slightly erratic” in cash flow. The bank recorded a loss of almost a quarter of a billion in unrealized securities in 2022, and an “off-balance sheet” risk of more than $850 million in letters of credit and guarantees in 2023.
One source said the BND has had financial problems before, and now bailed with almost a billion ARPA money in 2021.
The BND’s annual reports – some of the best insights available to the public – use reporting methods that hide enormous risks, losses and irregularities. All this raises the question of whether the BND benefits from the taxpayers of North Dakota, and whether the willingness of the BND to accept billions in riskier credit bets can give the Governor and the Attorney General, in particular, the main influence over who is behind accepting such contracts.
At a time when North Dakota is involved in a new scandal, critics inside and outside the government wonder whether the Governor and Attorney General are the right people to control unregulated banking assets of more than $10 billion and affect billions of dollars in private sector debt. and private bank subsidies.
Recent scandals include the deletion of all emails from the late Attorney General Wayne Stenehjem’s office following his sudden death in the absence of an autopsy, the sudden death of Stenehjem’s former Deputy Attorney General Troy Seibel being at the center of the deleted emails. scandals and key witnesses are evidence of what was destroyed. Seibel died at the age of 48 months ago, and the cause and location of death are still under investigation.
There is also a recent state scandal involving a federal guilty plea from former State Senator Ray Holmberg (R) for traveling to Prague to have sex with a young boy. The plea was in exchange for prosecutors dropping child pornography charges against Holmberg. Holmberg was charged after Governor Burgum announced his bid for President, and Burgum’s current Attorney General Drew Wrigley then easily found some emails that Stenehjem had deleted and allegations last year in a North Dakota newspaper that state officials were involved in activities that could endanger national security and aircraft safety. Federal prosecutors working for the Biden administration allowed former educator Holmberg to resign without bond and without bond, promising only that he would be fine.
Reports that Holmberg violated the terms of his release, and regularly went online, were ignored by Biden’s Justice Department. Holmberg has received an award for sending a major project through the legislature for government jurisdictions in the state, a transaction that is very likely facilitated by the Bank of North Dakota.
This consolidation of power by the Bank of North Dakota concerns North Dakota legislators who are concerned about the potential for abuse and additional scandals.
According to Senator Weston, speaking exclusively to Gateway Pundit, “The idea that our state entities will save $9.5 billion over 20 years – if they move deposits from the Bank of North Dakota – raises some questions. If the new report is accurate, the potential savings is about -about one annual state budget, or in another way, we can reduce 5% of the annual budget. If the bank writes deposits below the market or may generate negative results to the State entity due to bona fide development projects, then let’s talk about it this, and how it amounts to $475 million a year, and maybe I will support the disclosure accordingly.”
Sen Weston continued, “If not, there is some serious discussion that needs to take place in the legislature whether underperforming deposits waste close to 5% of our State’s annual budget due to ineptitude or worse at the BND. This will pay one-third of the state’s property tax revenues us, who will be elected this November in Measure 4 to be eliminated.
Senator Weston has observed the incident of state officials with debt authority seeking to influence private investors, then retaliate against those investors. While this happened outside the bank, the Senator noted that the bank also failed to step in when it would normally have done if the undertones were removed from the transaction. “We need to see proper controls and segregation so that all citizens can experience the ‘ideal North Dakota’ that I have experienced and believed in.”
Bank of North Dakota was asked to comment for this story, and declined to respond. Our inquiry was referred to the bank authorities, the Industrial Commission controlled by the Governor, the Attorney General, and the State Commissioner of Agriculture.